Legislation establishing a constitutional referendum, pending voter approval at a statewide election to be held March 29, 2025, has become law without the signature of Governor Jeff Landy, and would make a number of changes affecting income taxes, property tax, severance taxes, the cigarette tax, the motor vehicle license tax, and the power to tax. (L. 2024, H7 (3rd Extra. Sess.) (Act 1), effective as noted, and upon adoption of the proposed constitutional amendment at the statewide election to be held 03/29/2025.)
Income tax.
The legislation would replace the graduated income tax with a flat rate. The maximum state individual rate would not exceed 3.75%. For tax years beginning after December 31, 2025, a person 65 years of age or older would be entitled to an additional standard deduction equal to the amount applicable for a single individual provided in La. Rev. Stat. Ann. §47:294.
Property tax.
The proposed constitutional amendment would amend provisions regarding the listing of property on the assessment rolls and the classifications of property subject to ad valorem taxation, the percentage of fair market value applicable to each classification, and the valuation of certain property. The proposed constitutional amendment also would provide that the legislature may provide by law enacted by 3/4 of the elected members of each house for property exempt from ad valorem taxation. Once enacted, any change to an ad valorem tax exemption would also by law be enacted by 2/3 of the elected members of each house of the legislature. However, no measure legislating with regard to ad valorem tax exemptions, exclusions, deductions, or credits will be introduced or enacted during a regular session held in an even-numbered year.
Exemptions: Property owned by a nonprofit operated exclusively for religious purposes as a house of worship, residential housing for clergy, priests, or nuns, or a seminary or other educational institution training individuals for religious ministry would be exempt from property tax. Certain disabled veterans and their spouses also would be entitled to a property tax exemption, and other property exemptions would be implemented.
Special assessment level: The present constitution provides for special assessment levels for certain persons, including, but not limited to, persons who are 65 years of age or older and persons who are permanently totally disabled. It also includes requirements and restrictions for receiving the special assessment level and for the term of the special assessment level and provides for reassessment of the property when certain conditions are met. The proposed constitutional amendment would repeal the present constitutional provisions. The legislation also would add special assessment levels for senior citizens and veterans.
Severance tax.
The Louisiana Constitution currently establishes specific authorizations, requirements, and prohibitions regarding the levy of severance taxes by the state. The proposed constitutional amendment would repeal these provisions. The legislation also would include brine in the severance tax, repeal the severance tax allocations and caps and the revised distribution schedule, and establish a new severance tax allocation.
Cigarette tax.
The present state constitution establishes a minimum rate for taxes levied on cigarettes. The proposed constitutional amendment would repeal the present constitutional provision.
Motor vehicle license tax.
The present constitution authorizes the imposition of an annual license tax by the state on automobiles for private use and establishes requirements and restrictions relative to the tax. The proposed constitutional amendment would repeal these provisions but retain the requirement that no parish or municipality may impose a license fee on motor vehicles.
Power to tax.
The legislation would: (1) require 2/3 votes of the legislature for a new tax, an increase in an existing tax, the enactment of a new tax exemption, exclusion, deduction, credit, or rebate, or an increase the amount of a deduction, credit, or rebate, or the repeal of an existing tax exemption; (2) freeze the sales and use tax exemption on food for home consumption, effective January 1, 2025; (3) stipulate that no ad valorem tax will be imposed by Louisiana or a political subdivision on prescription drugs; (4) provide that the sales and use tax levied by a political subdivision will apply to any sale at retail, use, lease, rental, consumption, or storage of goods, services, and other products as authorized by or required by law; (5) provide that, notwithstanding any other provision of the state constitution to the contrary, all local taxing authorities would be authorized to amend their ordinances concerning sales and use taxes to conform any existing levy to the authority granted to those taxing authorities pursuant to applicable law; (6) provide that a political subdivision cannot levy a severance tax, income tax, inheritance tax, or tax on motor fuel; (7) stipulate that, effective January 1, 2026, no new sales and use tax exemption, exclusion, credit, rebate, or refund will be enacted it is applicable to both sales and use taxes levied by the state and those levied by political subdivisions; and (8) make changes regarding the collection of taxes.
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